Golden Minerals Company

Had to post the intro to tonights column. It is great to have days like today - its been a long time.

"What fun! Stop the presses! Think of yesterday as a movie script with a great plot and ending. The ending remains the same, but the plot was all wrong the way I wrote it. The silver open interest rose 1,194 contracts to 124,185 and the gold open interest rose 5,705 contracts to 556,464. This means the major factor in yesterday’s dramatic surges off the lows were not due to The Gold Cartel trying to cover their massive short positions … and not JPM attempting to flee the short side of silver. The new script with a new director … Café member Mitchell Jones got it right yesterday afternoon…

That's a good point because it underlines the fact that the buyer who reversed gold and silver to the upside today is not the same as the sellers who drove them down earlier. The reason: the sellers pummeled gold more severely than silver in the early going today, possibly due to the fact that they had already beaten silver like a red-haired stepchild in prior days. :-) Comparing today's peak prices with Thursdays, we find that gold is down .2% and silver is down .5%, even after today's rally. Thus silver came back more quickly today only because the cartel turned its full attention to gold in the early takedown, rather than because of any intrinsic strength of silver. As I see it, the key point to infer from today's action is that we have a really massive bull making his presence felt in these markets, with the proof lying the eerily precise coordination between the upward moves in gold and silver. Gold didn't go up because silver pulled it up, and silver didn't go up because it was pulled by gold: both went up because a really huge buyer stepped into both markets and bought with both hands. Today's events, in short, provide a strong hint that the cartel is now faced with an opponent who is as big as they are, and who may be even bigger. Only time will tell, of course. :-) --MJ

What it all means…

*Mitchell is correct. Yesterday’s sensational moves off the lows was initiated by some BIG player, or players, who appear to be taking on The Gold Cartel.

*JPM had to be very surprised (to say the least) to see silver go bonkers going into an option expiry. While surely they did some covering this week on the dips below $18, yesterday had to be a Pearl Harbor for them.

*The fact that silver could do what it did, with outside market conditions being what they were, remains astounding and a BIG, BIG deal. The large player wanted silver in the most urgent way. Price was not the issue yesterday, securing supply was.

It was not panic shortcovering, but buying of a panic nature.

*The extraordinary silver move suggests the physical market is seizing up, confirming what Adrian has been pounding the table about.

*Had a conversation with the erudite Jim Willie this morning. His sources tell him that the Chinese and Arabs are going after the gold and silver markets in London … with buying sprees every ten days. If so, the prices of gold and silver ought to go parabolic in the months ahead and probably much sooner. There is no way the LBMA crowd can cover their Ponzi-like fractional gold/silver exposure. If they have sold the same gold and silver to many multiples of parties, as we think they have, the LBMA bankers are going down … should the Arabs, Chinese, or anyone else be going after their physical holdings. They will be doomed. Jeff Christian will have to go into hiding.

*The odds are favorable that GATA’s testimony, and subsequent revelations (including the Adrian/Christian exchange) at the March 25 CFTC hearing was a game changer.

*The likelihood of gold/silver defaults and force majeures are increasing. Expect the CFTC and LBMA to come up with phony reasons as to why they occur.

*Holders of physical gold and silver in unallocated accounts could be in a real pickle. From what I know, if there is a default, owners would get cash at the price of the day of the default. But the price will really go bananas after the default, leaving gold and silver owners without any physical and not participating in the really big move up, which is why they wanted to own the stuff in the first place. The lawsuits will be MEGA."